Commentary

Outsmart eCommerce Giants

The retail industry dominated headlines throughout 2017 as it underwent a period of significant transformation, says a new paper fromDigitalCommerce360. From new channels for shopping to industry
consolidation, and a string of store closings, the shopping experience has changed substantially from just five years ago, says the report.

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Titans like Amazon and Walmart continue to
constantly outdoing one another with new and innovative offerings to appeal to consumers, so much so that independent brands are now tasked with meeting higher expectations, says the report.

This eBook explores what more than 4,000 consumers across four different regions of the world, United States, United Kingdom, Canada and Australia, value in their online experience, where
opportunity exists, and how brands and retailers can execute to ensure that they maintain a competitive position as the industry continues to rapidly transform.

Understanding who your shoppers
are and what they are purchasing online is critical for eCommerce success, says the report.

Women Are More Frequent Online Shoppers, Although Men Are Not Far Behind:

% of Online
Shoppers

Women

USA 38.2%

Canada 24.6%

Australia 23.8%

UK 41.3%

Men

USA 31.7%

Canada 22.3%

Australia18.4%

UK 30.9%

The
Types Of Products Being Purchased Online Are Similar Across Regions As Well:

Clothing and accessories is the top category consumers purchase online (55.5%), followed by electronics
(43.2%), then health and beauty (28.7%).

The UK was the only outlier, replacing groceries (31%) for health and beauty as their third most popular choice.

Alternatively, groceries
placed fifth in the US, Australia and Canada, but the US was in the lead among that group at 25% (Canada 17% and Australia 18.1%).

While in most regions, grocery has not yet broken
into the top three categories purchased online, the data does indicate an area of opportunity. According to a global study conducted by Euromonitor International, a consumer market research firm,
global online food and beverage sales will rise 80% over the next five years.

The increase in online grocery is consistent with the survey finding that most online shoppers are purchasing
lower cost items and generally spend less than $100 per month on goods. The UK reported the largest number of low spending shoppers, with 56.2% of respondents reporting that they spend under $100 per
month online. US respondents exhibited a nearly even split between those that spend less than $100 per month (42.2%) and those that spend between $100-500 per month (42.3%).

The impact that
Amazon (and eBay before it) has had on consumer convenience is substantial, as the majority of consumers who shop online hold a membership to an eCommerce marketplace. Survey results found that 20%
more American consumers hold memberships than other English-speaking countries at 76.2%, with Canada and the UK even (58.6% and 58.2%, respectively), and Australia close behind at 55.8%.

Among
these marketplaces, Amazon is the clear favorite in global markets where it is available, recently displacing eBay. The only outlier is Australia, where Amazon recently became available starting only
in December 2017. In this case, eBay served as the most popular eCommerce marketplace with 63.8% of market share. Other consumer marketplaces such as Jet.com, Rakuten, Alibaba and Allegro fall
significantly short of Amazon where, across all regions, these sites control less than 15% of consumer memberships.

A Guide To Winning Online Shoppers In 2018, According To The Report:

The survey findings prove that major eCommerce marketplaces and industry leaders are setting the tone for consumer expectations, as illustrated through the sharp differences in expectations between
markets in which Amazon is active and those where it is not. Because Amazon is so prevalent across most English-speaking regions, it is impacting consumer standards when shopping elsewhere.

Price is king, says the report. Over 60% of respondents across regions reported that the most important factor when shopping online is that the goods they are purchasing are the best (lowest)
price… 66.9% in Canada, 64.5% in the US, 63.4% in Australia and 61.2% in the UK.

Knowing and trusting the brand behind the product came in second across the board, at a considerably
lower rate - 49.8% in Canada, 47.7% in the UK. 44.4% in Australia and 42.8% in the US. This finding alone proves the importance of retailers finding ways to build brand loyalty in order to maintain
name recognition and remain competitive.

Shipping times and easy returns are relatively equal in importance to the consumer. In the US, consumers are split between expecting their goods to
be delivered within two days or less (34.6%,) and expecting them in under a week (34.1%), showing that retailers have some flexibility in their delivery windows. However, all countries want their
purchases shipped in a somewhat timely manner, with less than 9% of respondents across regions listing that delivery times “don’t matter” to them, says the report.

Easy
online returns produced similar numbers, with consumers in the US caring most about this at 37% and Canada in second at 34.3%.

Interestingly, more important to consumers than expedited
shipping is free (or inexpensive) delivery. With the rise of eCommerce, free shipping has become a commodity in the US, with 60% of consumers not expecting to pay for their goods to ship and 23.5%
willing to pay up to 10 dollars.

The report summarizes with lessons learned and emerging opportunities based on the drastic rise of eCommerce resulting in a re-setting of customer
expectations, concludes the report. Retailers should focus on emerging global markets where opportunity to gain a foothold and directly impact the customer experience remains strong. While retailers
work to keep up with market leaders, such as Amazon, in the US and abroad, they should set their sights on cross-border strategies to gain a leg up. Brands that can get ahead of (or beside) the
inevitable commoditization of eCommerce offerings stand a better chance of gaining influence in new regions.

Perhaps, concludes the report, above all retailers must understand their customers.
Through having a grasp on what their customers are looking for and at what price, retailers will be able to build the ideal experience for their base. Through these survey findings, the report says
that consumers are shopping online for convenience and are interested in purchasing various items. With these underlying motivations in mind, retailers will be better positioned to build eCommerce
strategies that highlight and differentiate their offerings.

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